17553 TELUS AR12 front Eng - AnnualReports.com

1 2012 ANNUAL REPORT firstput tingYU2 . TELUS 2012 ANNUAL REPORTC aution regarding forward-looking statements summaryThis document contains statements about expected future events and financial and operating performance of TELUS that are forward-looking. By their nature, forward-looking statements are subject to inherent risks and uncertainties and require the Company to make assumptions. There is significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate.

2 Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause assumptions, actual future performance and events to differ materially from those expressed in the forward-looking statements. Accordingly this document is subject to the disclaimer and qualified in its entirety by the assumptions (including assumptions for 2013 targets, semi-annual dividend increases to 2013 and CEO three-year goals to 2013 for earnings per share and free cash flow growth to 2013 excluding any one-time items such as spectrum costs)

3 , qualifications and risk factors referred to in Management s discussion and analysis starting on page 40 of this annual report and in other TELUS public disclosure documents and filings with securities commissions in Canada (on SEDAR at ) and in the United States (on EDGAR at ). In addition, there can be no assurance that the Company will initiate a normal course issuer bid in 2013 or maintain its dividend growth model beyond 2013. TELUS disclaims any intention or obligation to update or revise forward-looking statements, except as required by law, and reserves the right to change, at any time at its sole discretion, its current practice of updating annual targets and financial information is reported in Canadian dollars unless otherwise 2013 TELUS Corporation.

4 All rights reserved. Certain products and services named in this report are trademarks. The symbols and indicate those owned by TELUS Corporation or its subsidiaries. All other trademarks are the property of their respective s inside1/2 INCH GETS TRIMMED OFF FOR GATEFOLDOpen to find out more about TELUSG atefold, 1- 5 Corporate overviewWho we are, what we offer, and a look at our 2012 performance and 2013 targets29-172 Financial reviewDetailed financial disclosure, including a letter from our CFO.

5 And other investor resources6-13 CEO letter to investorsHow TELUS is delivering on its proven growth strategy and focusing on putting customers first18 -19 Community investmentHow we give where we live 14 -17 Review of operationsA snapshot of our wireless and wireline operations20-28 LeadershipOur Executive Leadership Team, Board of Directors, and questions and answersA quick viewTELUS wirelessTELUS wireline2012 external revenue and annual growth$ billion, an increase of $ billion, an increase of of TELUS consolidated revenue54%46%2012 EBITDA and annual growth$ billion, an increase of 13%$ billion, a decrease of of TELUS consolidated EBITDA62%38%Industry drivers.

6 Growing wireless industry penetration (currently estimated at 80% in Canada) .Increasing smartphone adoption and usage driving data revenue growth .Accelerating growth of mobile commerce, machine-to-machine, mobile video and roaming services .Capturing growing share of consumer entertainment and Internet market with IP-based services .Delivering solutions for businesses with complex and changing technology needs .Mitigating the impacts of competition and technological substitution with cost efficiencyTELUS business drivers.

7 Continuing 4G LTE network roll-out to reach more Canadians .Offering Clear and Simple solutions .Increasing lifetime revenue through improved customer loyalty (lower churn) and higher usage .Enhancing efficiency to control costs while enhancing customer experience . Bundling future friendly home services to enhance customer value . optik TVTM and high-speed Internet services growth . Investing in broadband technology, innovative new services and cost efficiency . Satisfying business clients evolving needs for cloud computing, security and managed hosting solutionsTELUS is a leading national telecommunications company in Canada, with $ billion of annual revenue and million customer connections including million wireless subscribers, million wireline network access lines, million Internet subscribers and 678,000 TELUS TV customers.

8 TELUS provides a wide range of communications products and services including wireless, data, Internet protocol (IP), voice, television, entertainment and video. In support of our philosophy to give where we live, TELUS , our team members and retirees have contributed more than $300 million to charitable and not-for-profit organizations and volunteered million hours of service to local communities since 2000. Who we areOur valuesWe embrace change and initiate opportunityWe have a passion for growthWe believe in spirited teamworkWe have the courage to innovate1/2 INCH GETS TRIMMED OFF FOR GATEFOLDW irelessAcross Canada, TELUS provides Clear & Simple voice and data solutions to million customers on world-class nationwide wireless networks and devices.

9 Total coverage of 99% of Canadians over a coast-to-coast 4G network, including 4G LTE and nationwide HSPA+, as well as CDMA and Mike iDEN network technologies. We offer leading-edge smartphones, mobile Internet keys, mobile Wi-Fi devices and tabletsDigital voice: Postpaid, prepaid and TELUS Push to Talk , and international roaming to more than 200 countriesData: Web browsing, social networking, messaging (text, picture and video), TELUS mobile TV , video on demand and the latest mobile applications. WirelineIn British Columbia, Alberta and Eastern Quebec, TELUS is the established full-service local exchange carrier offering a wide range of telecommunications products to consumers, including residential phone, Internet access, and television and entertainment services.

10 Nationally, we provide telecommunications and IT solutions for small to large businesses, including IP, voice, video, data and managed solutions, as well as contact centre outsourcing solutions for domestic and international networks and applications: Leading-edge IP networks that offer converged voice, video, data or Internet access on a secure, high-performing networkConferencing and collaboration: Full range of equipment and application solutions to support meetings and webcasts by means of phone, video and InternetContact centre and outsourcing solutions: Managed solutions providing secure, low-cost and scalable infrastructure.